This Insider Has Just Sold Shares In Paycom Software

Some Paycom Software, Inc. (NYSE:PAYC) shareholders may be a little concerned to see that the Chief Operating Officer, Randy Peck, recently sold a substantial US$764k worth of stock at a price of US$212 per share. However, that sale only accounted for 8.5% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Paycom Software

Paycom Software Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Craig Boelte, for US$1.9m worth of shares, at about US$156 per share. That means that even when the share price was below the current price of US$219, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 4.0% of Craig Boelte's stake.

In total, Paycom Software insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does Paycom Software Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Paycom Software insiders own 12% of the company, worth about US$1.5b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Paycom Software Insider Transactions Indicate?

Insiders sold Paycom Software shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Paycom Software makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for Paycom Software and we suggest you have a look.

Of course Paycom Software may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.